Oil prices are experiencing a surge following simultaneous announcements by Saudi Arabia and Russia to curtail supplies.
Saudi Arabia has already instituted a reduction of an extra 1 million barrels per day in output, a move it plans to extend into August.
These strategic actions signify the major oil producers’ efforts to buoy prices, following several months of decreasing trends. As of this point in the year, benchmark Brent crude has seen a decrease of roughly 11%, propelled by China’s inconsistent recovery and looming concerns of a U.S. recession.
Both Brent crude and West Texas Intermediate witnessed an increase as a result of these decisions made by the two leading members of the OPEC+ producer cartel.
In an effort to elevate global oil prices, Russia, under the direction of Vladimir Putin, will decrease oil exports by half a million barrels daily in August.
Russia’s Deputy Prime Minister, Alexander Novak, stated, “To maintain equilibrium in the oil market, Russia will voluntarily lower its oil supply for the month of August by 500,000 barrels per day, trimming its exports to the world markets by the same amount.”
Despite Western sanctions, Russia has managed to keep its exports robust, and it had already committed to reducing its output by 500,000 barrels per day to 9.5 million barrels per day from March till the year’s end.
In the realm of oil exports, Russia sits as the second-largest global exporter, trailing behind Saudi Arabia. The latter is extending its voluntary oil output reduction of 1 million barrels per day for an additional month, encompassing August, according to an announcement by the state news agency SPA this morning.
Benchmark Brent crude observed an 89-cent increase to $76.30 a barrel following a 0.8% gain on Friday.
